Strong property rights key to cooperation

The technology standardization space perfectly illustrates the importance of these issues. Many of the most high-profile modern technologies are the fruit of large-scale collaboration coordinated though standards developing organizations (SDOs). These include technologies such as Wi-Fi, 3G, 4G, 5G, Blu-Ray, USB-C, and Thunderbolt 3.[22] This type of collaboration would surely be far more costly without well-delineated property rights and the legal means to enforce them. The reasonable assurances of protection through patent rights provides innovators the security they need to share the information necessary to enable the creation of these organizations. The patent system enables modern firms of all sizes in a dynamic economy to coordinate their behavior to produce modern marvels like the smartphone. The coordination necessary for this sort of feat is hard to imagine without some form of enforceable property right in inventions. This is not to say that some of these features could not be replicated by private ordering or internalized by mergers. Theoretically Samsung or Apple could invent and produce all of the technologies necessary to produce their devices, but the cost for such devices would likely be astronomical and the development time would be measured in years, not months. Absent compelling evidence that these alternative institutions or hierarchies would emerge, policymakers should proceed with caution, or risk killing the goose that lays the golden eggs. At the very least, the fact that many of the most dynamic industries in the world—notably the smartphone and computer hardware industries—develop technologies collaboratively within SDOs is evidence that the benefits of patent protection go well beyond incentives to innovate.